‘I realised that he’d been running a Ponzi scheme’: Business partner’s shock discovery

The business partner of a man accused of operating a $100 million Ponzi scheme through an Ivanhoe law firm has told a court he discovered a secret cache of loan files stored in a cabinet in his colleague’s office after his death.

Shane Maguire told a Melbourne court on Thursday that he found the files in the office of his long-time business partner and alleged Ponzi scheme operator John Adams after his sudden death in 2023 at his holiday house near Lorne .

Maguire was called to give evidence by liquidators to one of the companies tied to the now notorious investment scheme as part of a series of public examinations.

Adams, Maguire and Vincent Sier were partners in the AMS Ivanhoe Lawyers practice, which serviced a who’s who of Melbourne’s affluent set, including former Carlton Football Club president Ian Collins and a host of racing industry figures, as well as the Victorian Bookmaking Association.

Many of the firm’s well-heeled clients invested with the firm, which then loaned the money out at much higher interest rates than the banks.

Upon Adams’ death, it was discovered he had been allegedly operating a Ponzi scheme and that money from new investors had been used to pay out the generous returns to old investors. Adams’ death and the collapse of the scheme wiped out tens of millions of dollars invested by the firm’s clients.

Maguire told the court he was aware the firm had operated a mortgage scheme from 2004 but that Adams had led him to believe it had been closed after 2013.

“I was trusting of John Adams. We were partners, we worked together for a long time. After his death I found out that I should not have trusted him. I have paid a significant consequence,” Maguire said.

Since the collapse of the scheme, Maguire and Sier have been hit with dozens of civil claims from investors who insist that the pair were aware of the mortgage fund as their names were on key documents. Both have retired from legal practice and neither have been formally accused of any offence.

During his examination, Maguire was shown several loan documents, bank statements and company documents that showed he was co-director with Adams on several companies set up to manage the individual investments made by firm clients in the scheme

One of the documents was a bank statement for an AMS bank account that received much of the mortgage funds, which Maguire said was not a firm account.

“The moment I saw the bank statements being sent to Lorne it concerned me there would be no reason they would be sent to Lorne but to be hidden,” Maguire told the court.

The court heard the firm had obtained a bank guarantee to help cover the financial obligations of the mortgage fund.

Maguire told the court that he was aware of the guarantee from about 2022 and had asked Adams to close it out several times.